Quote:
Originally Posted by stumbled
These figures you give certainly seem like u've either plucked them from air or ur misinforming people on the forum, cause it all sound very nice hypothetically, but in reality property has peaked in world markets.
Yes you can buy a studio @ $100k dollars(365k dhs) and these prices are finished product prices, the initial capital gain was to be made when the project was launched.
Now, the profit to be had is in the rental return @10% gross, before taking into account maintenance which is 7-9k per year, agents fees 5-10% ,not forgetting trhe mortgage cost if one has to borrow this money and lastly if one isn't resident in Dubai one needs to pay taxes on their return.
The major crunch comes, at the moment lending rates are over 7% in Dubai from any bank. And these rates are on the rise. Lets assume if you get a rate of 7,5% on $100k, thats $7,5k interest alone.
Now, if you are making 10 % gross on rental income, once you take out the expenditure, like maintenance,agents fee, travelling to Dubai if not resident et..etc you are lucky if you can get a return of 6% nett. So, this invest ment is a loss on returns , now the second question is will it give you capital return, with the rates rising and flooding of new developments,completion of old, PEOPLE STRUGGLING TO MAKE PAYMENTS TO BANK AND GET MORTGAGES, I some how doubt it.
I say sell now and run!!!!!!!!!!!!!!
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Prices are already going up after New Year you want be able to find a studio for less than
400000.00 Apart from Morocco.
The rents are going up by the end of next year a studio will be 45,000DHS per year
Monorails to be build to international city and completed by end 2010.
So wait one more year and triple your money
By a studio 100,000$
3 years rent 35,000$
Sell it after 3 years for 160,000$
Can’t go wrong